For the first time since 2006, the governing coalition will not include an ultra-religious political party, such as previous coalition members Shas and United Torah Judaism. Joining the newly formed Likud-Beiteinu electoral alliance in the coalition are the secular, centrist Yesh Atid Party, the national-religious Jewish Home and the centrist Hatnua. Together, these four parties will account for 68 of the Knesset's 120 seats.

When Netanyahu called early elections in October 2012, it seemed as though his Likud Party was situated to win easily. But over the past eight months, popular support for Netanyahu and Likud waned considerably. Many Israelis instead cast their votes for two relative political newcomers: Yair Lapid of Yesh Atid and Naftali Bennett of Jewish Home.

A Mutual Understanding

Their two parties became unexpected allies during coalition negotiations, pledging that neither would sign on without the other. Yet the parties differ greatly. Whereas Yesh Atid is secular and favors two-state solution with the Palestinians, Jewish Home is religious and advocates the annexation of the West Bank's Area C. But both parties decided to push these differences aside.

Jewish Home is staunchly Zionist. Intellectually, the party is akin to Mafdal, a religious-Zionist party that was a partner in every coalition government in Israel from 1956 to 1992. The tenets of Yesh Atid and of Jewish Home harken back to the same Zionist values that defined Israel's creation in 1948. Both parties stand for a strong Jewish state in Israel, but Jewish Home's brand of Zionism is grounded more in their own religious values.

It was in this mutual understanding of Zionism that Yesh Atid and Jewish Home found their common ground. Resentment has long been building in Israel against ultra-religious groups, which largely do not serve in the army and which have half the unemployment rate as the rest of Israel. Some of these groups even believe establishing a Jewish state prior to the arrival of the Messiah is itself blasphemous; therefore, they are publicly and unabashedly anti-Zionist.

Lapid and Bennett campaigned on reforming the system and are serious about instituting national service for the ultra-religious communities living in Israel. Whatever form that service takes, Yesh Atid and Jewish Home's presence in government mean that conversation will happen.

Lapid and Bennett's political alliance has benefitted their respective parties while weakening Netanyahu and the Likud-Beitenu alliance. This is in part because Lapid and Bennett know that it is now, during the coalition negotiations, that they have the most influence. Netanyahu was not going to risk enduring a second-round of elections, given Likud-Beitenu's disappointing performance and Yesh Atid's surging popularity. For example, Lapid insisted that the government should have fewer ministers; Netanyahu has reportedly agreed to reduce the number of ministers from 30 to 20. Besides having to compromise on these smaller issues, Netanyahu has less patronage jobs to pass out to increase his own political power. Already reports are beginning to surface of younger Likud politicians who are dissatisfied with the allocation of the ministries.

But while Netanyahu has had to make concessions in these negotiations, it would be a mistake to underestimate him. Once the government is formed, Netanyahu will be able to exert his own political influence, in large part because there are very serious differences between all of his coalition partners, who he will be able to use to his advantage. For example, Netanyahu reportedly agreed to put Tzipi Livni of the newly formed Hatnua Party in charge of negotiating with the Palestinians, but Lapid has balked at that in public.

In addition, the prime minister plans to put a Jewish Home member in charge of the Housing Ministry. This will create a natural tension in the government; the Housing Ministry controls settlement construction and Jewish Home will likely look to build more while Yesh Atid and Hatnua support negotiations with the Palestinians. During these coalition negotiations, it was easy for Yesh Atid and Jewish Home to make demands on Netanyahu, but that will change once they are invested in the success of the government.

Focusing Inward

The composition of Israel's coalition government will not meaningfully influence or change Israeli foreign policy. There is broad political agreement in Israel about the external challenges the country faces: There are many, but none is immediately existential. To its north, Israel is preparing for the spillover of the Syrian conflict by continuing to develop Iron Dome, by moving forces to the north, and by building a new security fence. Israel already has demonstrated its willingness to attack targets in Syria when it feels threatened or when it sees an opportunity to make a small strategic gain that will cost it little.

To the South, Israel is building a fence on the border with Egypt and has established a new regional brigade to counter spillover from Sinai. Israel's relationship with Jordan is strong, and though Israel must worry about domestic political pressures there — economic issues, Syrian refugees and its own political unrest — King Abdullah has thus far successfully managed rising political tensions.

Iran remains Israel's biggest foreign policy issue. Netanyahu will continue to prod the United States to take action against Iran's nuclear program no matter who is in his coalition. In fact, Iran will likely be the main topic of conversation when U.S. President Barack Obama makes his first visit to Israel on March 20.

The formation of this coalition government is rather a reflection of the Israeli population itself. Israel is surrounded by states mired in political turmoil. But in recent polls, voter turnout was the highest it has been since 1999, when Ehud Barak was swept into power promising to continue the Oslo Peace process and to finalize a peace agreement with the Palestinians. The failure to reach an accord at Camp David II effectively ended Barak's tenure as prime minister, and the overall disappointment of Israelis in the failure of Camp David II and the subsequent intifada and Gaza disengagement was reflected in the lower voter turnouts of the 2000s. The 1990s were a time of great political optimism on the left and among the secular parts of Israel, and that optimism was expressed in Israel's pursuit of peace with the Palestinians.

That so many Israelis voted suggests that they are again more engaged in politics. But this time, the Israelis are looking inward at the problems with their education system; with ensuring the continued development of natural gas resources at Tamar and Leviathan that has been stalled over whether the resources will be used exclusively for domestic consumption or for export. Additionally, they are looking at problems with changing the electoral system (already an agreement has been reached to raise the threshold for seats in the Knesset from 2 to 4 percent in the next elections) and on drafting new legislation about the relationship between the ultra-religious and the state.

It is not altogether surprising that such figures as Lapid and Bennett were elected; it is likewise unsurprising that they cooperated with each other for the sake of political expediency. But the fact that they both ran on clear domestic agendas and held fast to those principles during coalition negotiations is revealing of the character of this new Israeli government. There are many challenges ahead; the ideological linkage between Jewish Home and Yesh Atid may not hold as they try to find common ground to make serious reforms in Israeli society. But it is almost quintessentially Israeli that while new threats are multiplying on its borders, Israel's government will look inward as it tries to strengthen itself against the challenges to come.